Breathing Space – The Debt Respite Scheme

What is “Breathing Space” – The Debt Respite Scheme?

Breathing Space is a government scheme that provides temporary protection from your creditors if you are struggling with debts allowing you time to seek professional debt advice. 

There are two types of breathing space, standard breathing space and mental health crisis breathing space:-

	Standard Breathing Space	Mental Health Crisis Breathing Space
Who is eligible?	An individual with a qualifying debt who meets eligibility criteria and conditions.	A client with qualifying debt who meets eligibility criteria and conditions, who is receiving mental health crisis treatment.
What is the criteria?	• You must be an individual living in England or Wales. • Must be struggling or about to start struggling to maintain payments towards debts. • You have to have at least one qualifying debt, such as credit cards, loans, over drafts, payday loans, catalogues etc. Other debts including rent, mortgage, utility and council tax arrears also qualify however you do have to maintain ongoing payments and it is only the arrears that can be included. • Not have the means to clear debts, e.g. ISA’s or assets which can be sold • Not have a Debt Relief Order, and Individual Voluntary Arrangement or be an undischarged bankrupt. • Not already had a breathing space in the last 12 months.	• Must have a qualifying debt. • Must be receiving mental health crisis treatment.
What are the conditions?	• You must engage with the advisor throughout the Breathing Space. • You must keep paying some ongoing liabilities such as your priority bills. You must not take out additional credit over £500.	Nominated point of contact must engage with the debt adviser.
How often can you apply	No more than once a year.	No limit.

Is Breathing Space suitable for me?

If you are struggling or about to start struggling with problematic debt and require time to seek debt advice and consider your options Breathing Space could be for you.

The conditions above do not apply for Mental Health Crisis Breathing Space.

There are certain debts cannot be included in the breathing space. These include ongoing rent or mortgage payments, ongoing utilities and council tax, unless you have received a reminder notice for the remaining year’s bill for council tax.

Although Creditors cannot apply or backdate the interest accrued or take enforcement action during the breathing space, once the breathing space has ended, if you haven’t kept up with payments it may still be treated as a breach of the repayment plan

Who can provide Breathing Space?

Breathing Space can only be provided by a debt adviser authorised and regulated by the FCA to provide Debt counselling or a local authority who provides debt advice to its residents. 

The Debt Advisor Limited are authorised and regulated by the FCA, this means we are able to offer debt advice and deliver both formal and informal solutions we can assist you with Breathing Space.

The breathing space process

1. Get debt advice
   If you get debt help from us, we can check to see if you could benefit from Breathing Space, and if you’re eligible.
2. Apply
   If you’re eligible and would like to apply, we’ll submit your application to the Insolvency Service, who administer the scheme.
3. Breathing Space starts
   Once your application is submitted, your Breathing Space will start. This will usually happen within two working days.
4. First 20 days
   Within the first 20 days creditors can challenge your application for Breathing Space, as well as specific debts being included in the scheme.
5. Add debts
   You can add a debt to Breathing Space after it has started as long as the debt existed before your Breathing Space began. The protections will then applying for the remainder of the 60 days.
6. Creditor review
   The clock for creditors to challenge the inclusion of a new debt restarts when the new debt is added, but this only applies for the new debt, with protection still in place for other debts.
7. The 30 day review
   Between day 25 to 35, we’ll review your situation. In most cases, this will result in the scheme continuing for the full 60 days, but Breathing Space could be cancelled or specific debts could be removed in certain circumstances.

When contact is made with The Debt Advisor during the initial call the adviser will be able to determine whether Standard Breathing Space or Mental Health Crisis Breathing Space is appropriate.

If you would like to use this so, detailsof your name, address, date of birth and creditor details will be added to the electronic service.

Your details will then be entered into the moratorium register by the end of the following working day

Breathing Space will then start the following day, and creditors will be notified of the Breathing Space via the online portal.

For Standard Breathing Space there will be a mid-way review after day 25 and day 35. This review is to determine all of the conditions for the Standard Breathing Space are being met.

For Mental Health Crisis Breathing Space the debt adviser will contact the nominated point of contact to check whether the individual is still receiving mental health crisis treatment every 20-30 days. Once the mental health crisis treatment has ended the Mental Health Crisis Breathing Space will end 30 days later.

Important Information

All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up your plan and maintain it – all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available. Retained payment may place you further into arrears. You have the right to a cooling off period of 14 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term. Calls to our free phone number from mobile phones and other networks may be charged.

The Debt Advisor Ltd is authorised and regulated by The Financial Conduct Authority. This means we are able to offer debt advice and deliver both formal and informal solutions. All debt solutions need to be carefully considered and you must take independent debt advice. We are a commercial organisation and if you choose a solution with us fees will apply.

We hope that the information and debt advice on this site including Frequently Asked Questions, will help inform you.